Probes into Business Scandals Produce Much Smoke, No Fire

December 7, 1971

JERUSALEM (Dec. 6)

Official inquiries into two alleged business scandals produced smoke but little fire today. Deputy Premier Yigal Allon whose name was mentioned in the Knesset probe of the bankrupt Autocar Co, yesterday, admitted that the gift of a motorboat by the firm to his home village of Kibbutz Ginnosar was made with his knowledge but refused to comment further on the matter. The inquiry into alleged corruption of the affairs of Netivel Noft, the government-owned company drilling oil in the Sinai, entered its third week with no end in sight.

According to testimony taken yesterday by the Knesset finance committee, Autocar, now in receivership, once planned to manufacture motorboats but abandoned the idea and gave the prototype model to Kibbutz Ginnosar on the shores of Lake Kinnereth. Sources at the Education Ministry which is headed by Allon, explained today that the firm had approached Ginnosar fishermen in 1963 to test three fibreglass craft. Two of them sank and Itzhak Shubinsky, managing director of Autocar, agreed to let the kibbutz keep the third boat, they said. The boat was eventually sold for $250 and the proceeds spent on sports facilities for the kibbutz children, according to the sources.

There was no comment from any quarter today on yesterday’s testimony by the former chairman of the Autocar board of directors that Finance Minister Pinhas Sapir solicited a $24,000 gift from the firm for Kibbutz Alonim which was recorded as an agent’s commission in the company’s books.

The Netivel Neft inquiry in which some of the country’s top legal talent is participating, has generated little more than mutual recriminations between the principals involved. The State-commissioned panel headed by Supreme Court Justice Alfred Vitkon has so far heard conflicting evidence from Deputy Finance Minister Zevi Dinstein, Yaacov Salman, manager of the Government Companies Authority, and Mordechai Friedman, managing director of the oil company. Testimony was also heard from Dr. David Niv, an oil geologist who originally brought charges of mismanagement and theft against Friedman.

Today’s session was concerned with the question of who had stopped a police inquiry into the alleged large scale theft of government owned equipment assigned to Netivel Neft and why. Dinstein, Salman and Friedman each accused the other of having asked the police to halt their investigation. They also accused each other of having blocked an independent probe by the Treasury of the company’s affairs.